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Power capacity addition heads for record this fiscal

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Surge comes from private developers; Eleventh Plan target may still be missed.

Anil Sasi

New Delhi, Jan 27

Bolstered by a stellar performance by private sector developers, the power capacity addition during the first nine months of the current fiscal has already surpassed the record 9,585 MW achieved in 2009-10.

The capacity addition in the 12 months of last fiscal was so far the highest achieved in a single year since independence.

Of the 9,730-MW added during April-December this fiscal, the private sector accounts for more than half the new capacity at 4,986 MW. While a new record of around 14,000 MW is expected for the full year, boosted mainly by private sector projects, the capacity addition is likely to be well short of the official target of 21,441 MW set for the period, according to industry experts.

Progressive trend

Key private sector projects commissioned during the nine months include a 600-MW unit of the Adani Group's Mundra project in Gujarat, a 600-MW unit of Lanco's Udupi project in Karnataka, a 300-MW unit of Reliance Power's Rosa project in Uttar Pradesh and a 600-MW unit of Sterlite's project in Orissa.

The private sector's contribution to capacity addition has shown a progressively improving trend during the first three years of the current Plan period, despite most of these projects not having firm power purchase agreements, difficulties in getting site clearances, problems in open access, lower preference in allocation of fuel linkages, and impediments such as the need to furnish bank guarantees for getting transmission corridors built.

Private players have made up for slack performance by Central sector utilities such as NTPC Ltd and NHPC Ltd, as well as those set up by State sector generation utilities.

If the projections for this year come good, and a similar figure is achieved in the next fiscal, an overall capacity addition of around 55,000 MW is seen as a possibility during the Eleventh Plan, another record by a wide margin. This is, however, going to be well below even the downward revised target of 62,000 MW pegged for the current Plan period, which started with a target of 78,700 MW.

The overall capacity addition achievement during 2009-10 was about 66 per cent of the target (9,585 MW against a target of 14,507 MW). It was 31 per cent in 2008-09 (3,454 MW against a target of 11,061 MW) and 57 per cent in 2007-08 (9,263 MW against a target of 16,335 MW).

According to Government data, of the 9,263-MW commissioned in 2007-08, the private sector accounted for only about eight per cent. This improved to 25 per cent in 2008-09 (883 MW out of the 3,454-MW commissioned that year) and to 45 per cent during 2009-10.

Related Stories:
Power capacity targets will slip further on hydro delays
Private players power capacity addition yet again
Power capacity addition set to scale new peak

(This article was published in the Business Line print edition dated January 28, 2011)
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